Very good news indeed.
Given the very positive news coming from the first two PA Baristas locations I am very optimistic about Baristas ability to generate additional revenue and increase value for shareholders. Although the mall concept is far from proven in my eyes… The fact that BCCI and BMOC inked this JV so quickly after only a few weeks demonstrates that the concept is performing far beyond their initial expectations. As an investor, I am very much looking forward to 3rd and 4th quarter earnings which will give us a far better idea of whether we will see significant, sustained growth in BCCI’s stock price. However, to wait until the end of the year to begin increasing one’s stake in BCCI will not be my play.
As we have seen time and time again, there is often “interesting” activity weeks or even months ahead of a major announcement or release of financial data… Case in point, the announcement that baristas executives would receive future payment in the form of additional issue of stock. Yes, the announcement led to a dip in the stock price, but it makes perfect sense if the management believed there would be significant revenue growth in the company in the next 9-12 months.
To address Bob’s concern about the “Split Brand Problem.” Yes, it is an issue in the long-term. The drive-up kiosk concept is not a model that will drive growth in the company and management understands it. I would be very surprised if BCCI is still operating kiosks with scantily clad women 1-2 years from now. If the family oriented concept continues to show growth, I think its far more likely they sell off the kiosk locations or rebrand them to fit the family oriented model that is showing signs of success in PA.